The optics of the Gillard government’s education announcements – cutting university funding to pay for increases in school funding – were, on first glance, appalling.

For a government, and Prime Minister, to put so much political investment into education – not just kids’ education but national aspirations through the Asian Century white paper – and then say it will pay for ambitious school funding plans by cutting back university funding . . . well, there are more clangers than in Canberra’s National Carillon.

But let us unpack the Gonski school funding proposals and the higher education funding cuts and have a closer look at whether the government can make them work politically in the next few months.

The proposals outlined for school funding on Sunday are generally in line with what had been expected.

Series of loadings

The government is proposing to stick largely with central elements of the funding model spelled out by businessman
David Gonski
and his panel: a student-based, rather than school-based, funding scheme which nominates a base-line investment for primary and secondary students, then adds loadings based on disadvantage.

The only real changes to the Gonski model are in breaking down some of the loadings – for example, the school size and location loading is broken into two – and increasing the number of students held to be disadvantaged.

The politics of these reforms are simple: it is an offer the states literally cannot afford to turn down.

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This is not because the federal government is offering to contribute to their cost on a two-to-one basis – paying $9.4 billion of the extra $14.5 billion – but because of the trajectory of school funding if nothing changes.

New hole in budgets

School funding is now built on the existing funding agreement, plus national partnership payments, such as one rewarding good teachers, worth about $4 billion. These partnership payments start to run out this year and will not be renewed.

So the issue for the state premiers and chief ministers at Friday’s Council of Australian Governments meeting is not just whether they want to explain to their states’ voters why they might be missing out on extra federal funding, or whether they can find the money for their nominated contribution to the scheme, but how they will get by with a new hole in their budgets.

The federal government is making it clear that the states must agree to run a similar funding model if they want to receive the extra funding. There have been considerable discussions going on with the states about what will be required of them to get the extra funding, and considerable information gathered from the states to determine how the system would work.

The whole scheme has been designed to ensure no school will be worse off, even if the amounts flowing to non-government schools will be dwarfed by the amount going to government schools.

Incentives will be powerful

The government said on Sunday the amounts available to individual schools will soon be published on the MySchool website so voters can see the material impact on their school.

So the incentives to sign up for the states will be powerful, even if there are still low expectations in Canberra that Western Australia and Queensland will do so.

Some states may put forward their own model, punting that Labor will not survive long enough in government to make any serious negotiations worthwhile.

The latest Australian Financial Review/Nielsen poll, which has Labor’s primary vote below 30 and voters’ ratings of the qualities the Prime Minister needs to sell a package like Gonski still going south, would make such a position understandable.

The conversation with the states will continue until June 30 and not just be rushed through on Friday, meaning it will not be completed until after federal Parliament rises for the last time on June 27, and less than three months before polling day.

As long as the government can persuade voters it has found ways to pay for the scheme, it will at least have a powerful reform platform to take to the polls, whether or not that platform ever gets implemented.

The very ambition of the scheme creates its own problems for the Coalition.

Only partially true

On Sunday, Coalition spokesman
Christopher Pyne
was concentrating on the cuts being made to pay for Gonski.

But the opposition is not saying it would actually block those cuts, or even not replicate them.

The higher education cuts announced on Saturday were being promoted as ones that would help pay for Gonski. But this is only partially true. The cut that will be felt by the universities themselves is the efficiency dividend in 2014 and 2015, saving about $900 million. The dividend will cut the base from which future university funding is calculated. But it will not be a continued saving of the sort needed to fund something as ambitious as Gonski.

Cynical move

This cut is all about propping up the next couple of budget bottom lines and it will hit the universities hard, applying to everything they do including research.

It is hard not to see it in very cynical terms: as a cut made to one of the few sectors utterly reliant on government funding and for which there may not be a lot of sympathy in “middle Australia".

Voters in marginal seats might be ambitious for their kids to go to universities. They might not care too much about unis doing it tough.

The $1.2 billion saving from changing start-up scholarships to a HECS-style loan is hard to argue against because the success of the HECS model. The removal of the discount for advance payments of HECS will only disgruntle the relatively small group that actually pay their HECS payments upfront.

Constrained political capital

But are these savings really the best the government can do after all its talk about big structural savings to fund Gonski and the national disability insurance scheme?

There are plenty of savings announcements to be made between now and the May 14 budget, including more in the education sector. But the nature of the cuts to superannuation and education highlight how constrained Labor’s political capital is in arguing the legitimacy of its targets for savings.